Norway Post: Strong growth in revenue – increased costs
Norway Post presented accounts today which show a strong growth in revenue during the first three quarters of the year. At the same time the Group’s costs have increased, contributing to a weakening of the earnings compared with the same period last year.
Norway Post’s operating revenue as at 30 September 2007 was NOK 19.8 billion, compared with NOK 17 billion for the same period in 2006. The 16.4 per cent growth in revenue is mainly due to acquisitions and an increase in the volume of A (priority) and B (economy) mail as well as an increase in sales for the Group’s logistics products.
Earnings before interest and taxes (EBIT) as at 30 September 2007 were NOK 1 035 million, compared with NOK 839 million as at 30 September 2006. Earnings were positively affected by a gain on the sale of property (Norway Post’s letter centre in Oslo) of NOK 625 million in the first quarter.
After adjusting for non-recurring items, the Group achieved earnings of NOK 411 million as at 30 September 2007, compared with NOK 872 million for the same period last year.
“The development in earnings has been affected by increased personnel and transport costs. A tight labour market and lack of capacity in the transport industry have also contributed to weaker earnings,” says Dag Mejdell, the CEO of Norway Post.
The start-up of CityMail in Denmark has also negatively affected the Group’s results.
The extraordinary measures that were implemented after the delivery problems last winter have resulted in good delivery quality levels. An independent report on delivery times shows that Norway Post meets all the six licence requirements by a good margin. In the third quarter, 88.1 per cent of all A (priority) letters were delivered overnight. The licence requirement is 85 per cent.
The Group’s long-term goal is to achieve a market-leading position as an integrated postal and logistics group in Norway and the Nordic region. The EU recommendation to liberalise the remainder of the postal markets in Europe by 2011 will mean a restructuring and consolidation of the industry.
“Future earnings will continue to be affected by the accelerating growth in wages and prices along with increasing competition in the market. A continued strengthening of Norway Post’s market positions in both Norway and the rest of the Nordic region is expected to contribute positively to the total results and value creation,” says Mejdell.
